Copyright 1999 Federal News Service, Inc.
Federal News Service
AUGUST 4, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
1010 words
HEADLINE: PREPARED STATEMENT OF
JOHN
POWELL
VICE PRESIDENT, GOVERNMENT AFFAIRS, THE SENIORS COALITION
BEFORE
THE HOUSE COMMERCE COMMITTEE
HEALTH AND THE ENVIRONMENT
SUBCOMMITTEE
EVALUATION OF MEDICARE+CHOICE
BODY:
Thank you, Mr. Chairman, for the opportunity to testify today. The
three million members and supporters of The Seniors Coalition are grateful to
you for your excellent leadership of this subcommittee. We appreciate the
diligent and thoughtful work of its members and staff in helping to find
solutions to the many critical issues affecting the health of older Americans.
The Seniors Coalition believes that the enactment of Medicare+Choice was an
historic first step in giving seniors access to the kinds of health care options
available to other Americans. Seniors want choice, they want freedom from a
one-size-fits all program that only offers the same benefits to everyone
regardless of their needs or circumstances. Thus, the importance of the passage
of Medicare+Choice legislation cannot be overstated, and that is why we are so
disappointed that its promise has not been fully realized. I would first like to
speak for a moment about the history of Medicare. When Medicare was created in
the mid-1960s, the United States was facing a situation which had no precedent.
For the first time, large numbers of people were growing old before !hey died,
and neither our economy nor our society were equipped with programs to address
their health care needs.There are two important points about the historical
context in which Medicare was created that need to be mentioned. First, in the
mid-1960s, our understanding of the process of aging was limited. Most believed
that loss of mental faculties was a natural part of aging and that, to be useful
and effective, Medicare must be based upon a structure that would act in a
decision making role for beneficiaries who could not act on their own behalf. Of
course, we now know that assumption was incorrect. Critical thinking skills do
not necessarily diminish with age, and the vast majority of older Americans
remain sharp of mind throughout their life. But, unfortunately, we created a
bureaucratic structure, the Health Care Financing Administration (HCFA), which
was built upon this archaic and ageist theory, and which still operates on that
basis today.
Second, consider the changes in the practice of medicine that
have occurred in the last 35 years! When Medicare began, there had never been a
heart transplant; there were no medications for high cholesterol, had we even
understood its impact on the cardio-vascular system; patients spent weeks in
bed, flat on their back, recovering from cataract surgery; and the concept of an
artificial bone joint belonged to the realm of science fiction. Now, medicine is
increasingly focused upon the prevention of disease not just upon treatment of
acute illnesses; eye surgery is performed in shopping malls; and inpatient
hospital care is the exception, not the rule for not only the treatment of many
illnesses but even for many types of surgery.
The enactment of
Medicare+Choice was a major step in helping Medicare accommodate itself to the
realities of aging arid the practice of medicine in the late 20th century - or
so it was intended to be. But, two years later, it has not fulfilled its
promise. There are not hundreds of new entrants into the Medicare marketplace;
far too many beneficiaries do not have the luxury, of choosing from among a
number of' options. ,And why not? It is clear that increased choice was the
intent of the Congress. Thus we need to look elsewhere to find answers.
The
answer, we believe, lies in the seemingly endless succession of barriers that
have prevented full implementation of the Medicare+Choice program. First,
consider the fact that HCFA took over a year to publish the 833 pages of
regulations which laid down the ground rules by which insurers could enter the
Medicare market. With barely two months to submit proposals, the initial
deadline of last August 31 went by with barely a nibble.
Then, there was the
question of performance standards. Many insurers had no structure for collecting
the type of data required, not to mention the fact that such data collection and
management would require that some types of plans rewrite all of their existing
contracts with providers.
And now, a year later, the situation is no better.
Rather than there being a stampede of plans seeking to enter the market;.there
are, in fact, plans retreating from it. And, we now know, that is in no small
way related to yet another hurdle, the fact that HCFA has decided to squeeze out
$11 Billion over the next five years from the very plans that Medicare+Choice
was created to encourage to enter the senior market.
Choice and competition
are two sides of the same coin. Without competition there is no choice. But
neither can survive where there is no incentive. HCFA, one might argue, not only
removed the carrot, but also added far too many sticks.
Earlier this year,
The Seniors Coalition had the opportunity to testify before this subcommittee on
the risk adjustment methodology for Medicare+Choice payment
rates. We said then that we were gravely concerned that HCFA had chosen to base
them upon an outdated approach to the practice of medicine. We were concerned,
of course, that plans would not be adequately compensated for treating Medicare
beneficiaries in outpatient settings - and that this would result increased
incidences of hospitalization of Medicare beneficiaries or in plans leaving the
program. And, just like CBO, we did not expect that the new risk
adjustment system would change the overall payment levels for such
plans.
While we still believe that HCFA will take far too long to begin
using a variety of data for risk calculations, FIR 2419 is a major step toward
stemming the tidal wave of plans leaving Medicare+Choice, and we give it our
support. It restores the original intent of Congress by requiring the
establishment of a new method for risk adjustment calculation.
And finally, and most importantly, it will help to restore the original intent
of the Congress in its passage of Medicare+Choice - the empowerment of the
Medicare beneficiary as a healthcare consumer.
END
LOAD-DATE: August 5, 1999
